Before jumping in. it’s important to check if your business idea is viable
Not every business makes it and not every idea is sound. In fact, every day, an increasing number of start-ups fail because their business idea wasn’t available at all. The idea is central to your business. If your idea is weak, there is nothing anyone can do to salvage your business. No amount of smart marketing can help it gain ground if your product simply doesn’t appeal to a wider audience.
In such cases, it’s wise to simply kill the business before you become too invested in it and start losing money and wasting effort. However, identifying whether your business idea is viable or not isn’t easy. This is because as a small business owner, you’re attached to your business. Understandably, most people are reluctant to concede defeat in such cases. Here are some ways you can determine if your business idea is still viable.
Understand the Business You’re About to Enter Into
The first thing you need to do is research into the industry that you’re set to enter. Consider it carefully and figure out whether it’s still going to be around in the future. Study the industry keenly and understand its strengths and weaknesses. Once you gain an understanding of the business, think about the corner your business fits in.
For example, if you’re a company that makes notebooks, you might want to consider the future potential of pen and paper notebooks. Naturally, the product is fast becoming outdated so you need to either expand the scope of your company or completely drop the idea.
Understand Your Customers
After you understand the industry, you need to look at your customers. A brief survey will let you know more about your target demographic. You need to study the particular traffic into your website to get an idea of just who’s visiting it. For example, you can determine the age, sex, annual income and relative expenditure, etc from a survey. This allows you to create that coveted niche.
As you’ll know the direction the traffic is coming from, you can study the area and understand the average household income of the people living in the region. You need to expect just how many possible customers you might get and how many products you might be able to supply. If there’s any problem with the ratio between customers and product, or purchasing power and product, you might not be running a viable business.
Look at the Competition
Most marketers will tell you that competition is healthy and good competition can help you improve your products and services. But as they say, too much of anything is not good. If there’s too much competition and several well-established old companies in the industry you’re about to enter, you might want to consider you options carefully.
If the industry is packed, it’s very unlikely you’ll earn enough revenue to support yourself. It’s very important to enter the industry that has healthy competition but isn’t very crowded. Even if you have an absolutely unique product, you might find it very hard to break in the market